Standard Bank and Liberty’s transactional data from discretionary investors shows one thing clearly: while markets may move on information, investors often move on emotion. Despite access to sophisticated platforms and expert guidance, behavioural biases still drove many of this year’s investment decisions.
“Despite access to quality advice and robust investment platforms, we saw many clients make emotionally charged decisions that impacted portfolio performance,” says Famida Singh, Executive of Investment Proposition at Standard Bank Group Investments.
Standard Bank Group Investments, which houses several prominent investment brands including Stanlib, Melville Douglas, Shyft and SBG Securities, observed three of the most common emotionally charged investment transactions this year: the tendency to follow market momentum, panic buying and selling during volatile periods, and unjustified portfolio concentrations.
“Understandably, many investors found themselves navigating significant volatility in local and global markets this year, catalysed by the US tariffs and local political issues like the GNU’s VAT dispute. So, you’ll often see panic buying and momentum investing in times like this,” says Singh.
For instance, the US tariffs 30% surprise export duty put many South African assets under pressure initially. While the tariffs are still hurting many local exporters, the markets had already priced in that probability and therefore the impact has been limited.
1. Panic during volatility
Periods of volatility tested investor discipline in 2025. Some rushed to sell SA equities during the Budget impasse in February, and offloaded holdings in companies they believed would be affected by tariff developments again in April. These decisions locked in losses and sellers missed the rebound. Others froze, adopting a ‘wait-and-see’ approach that left them underexposed when markets recovered.
“What is most evident in this behaviour is that fear is a powerful driver,” notes Singh. “Even in wait-and-see situations, some clients were driven by fear of potential immediate losses, which overshadowed long-term growth potential. Not investing at all due to fear can also cause clients to miss out on good opportunities,” she adds.
2. Following market momentum
Another notable theme this year was momentum investing where more clients put money in sectors that had already shown strong performance. While this approach can be rewarding, timing remains a key factor.
Artificial intelligence and tech stocks drew in investors eager not to miss out. Bitcoin’s rally past $100,000 sparked a fresh wave of crypto enthusiasm. But many investors joined the rally too late, when prices were already too high to get substantial gains.
“Momentum investing feels logical; if something’s doing well, why not get on board? But it’s emotional logic,” explains Singh. “Our advisors work with clients to show them why it’s not always logical to assume that yesterday’s winners will keep rising.”
3. Overconfidence and portfolio concentration
Overconfidence, particularly among younger DIY investors, was another theme. Many built concentrated portfolios around high-performing sectors or trending stocks seen on social media. In many cases, these concentrated portfolios recorded deeper drawdowns when sentiment shifted.
“Social platforms can create an illusion of control,” says Singh. “But investing isn’t about predicting what’s next. It’s about diversification and being ready for what you don’t know. There’s no better way to do than following a carefully crafted financial plan with an accredited financial adviser,” says Singh.
As we look to 2026, the message is clear: discipline and long-term thinking consistently outperform reactive decisions. Professional advice helps investors stay focused and avoid chasing short-term performance.
“Many costly trend-chasing behaviours are avoidable,” says Singh. “At Standard Bank, we integrate behavioural data into financial planning to identify emotional triggers early and guide clients back to their strategy.”
SUPPLIED.
